This article explains how debt markets have malfunctioned in the crisis, with deleterious consequences for the real economy. I begin with a quick overview of debt markets. I then discuss three areas that are crucial in all debt markets decisions: risk capital and risk aversion, repo financing...

This article describes important determinants of the current financial crisis. In particular, the text focuses on the bounded rationality of banks which contributes to the credit cycle. The credit cycle is the mechanism that links the present financial crisis with earlier crisis. Shortcomings on...

Negative shocks to housing, most households’ largest consumption good, are expected to create strong credit demand to smooth these shocks over time. We estimate and trace a credit demand curve for households who recently experienced a negative shock to their housing stock. We use...

We develop a tractable general equilibrium model to analyze credit risk sharing via credit default swaps (CDS) and CDS market regulation under aggregate uncertainty. If available equity capital is below a threshold, any equilibrium of the basic economy with no CDS markets features firm default...

The study documented in this paper utilises a probit regression analysis to empirically investigate the key macroeconomic factors that influence credit risk in the peer-to-peer (P2P) lending market. By aggregating the United States (US) state-level data with LendingClub’s loan book covering...

This paper sets out how the law (being the law as at April 2019) relating to high-cost lending, is enforced. It identifies the current problems with enforcement that have been recognised in the policy papers to date, and outlines the reforms proposed in the 10 October 2018 reform package. It...

This report sets out the results of research by Victoria University of Wellington on certain key issues around debt collection in the context of lending under consumer credit contracts in New Zealand, as at date of writing (August 2019). The proposed changes to the law (in the October 2018...